We previously reported that anonymous sources were saying HP was going to lay off 25,000-30,000 people. We now know that those numbers were correct as Meg Whitman has announced a restructuring plan which will result in 27,000 workers being let go. To put that number in perspective, it is about 8% of HP's 325,000-person workforce.
People won't be losing their jobs immediately as these layoffs are part of a multi-year restructuring plan. As such, the cuts will only be fully implemented by October 2014 which gives employees plenty of time to find new jobs. The move is aimed at making HP more innovative and cost efficient and will include an early retirement program and a one-time charge of $1.8 billion.
"We are making progress in our multi-year effort to make HP simpler, more efficient and better for customers, employees, and shareholders," said Meg Whitman, HP chief executive. "This quarter we exceeded our previously provided outlook and are executing against our strategy, but we still have a lot of work to do."
HP expects to shed only 8,000 employees this year and will continue to invest in core research and development, enterprise servers, software, and services. HP performed better than expected and returned better-than-expected earnings. However, it was still performed worse than it did last year.
Seagate is looking to expand their grasp in the consumer market and what better way than acquiring a company that already produces consumer storage devices? Seagate has extended an offer to LaCie's CEO to purchase the CEO's and his affiliate's stock in LaCie which would give Seagate 64.5% of the outstanding shares, which is enough to have majority control.
Of course, this offer is pending approval by governmental regulatory agencies. Once Seagate gets these approvals, "Seagate would commence an all-cash simplified tender offer (followed as the case may be by a squeeze-out procedure) to acquire the remaining outstanding shares in accordance with the General Regulation of the French Autorite des Marches Financiers (AMF)."
The offer to the LaCie CEO by Seagate is pretty good. The offer is at €4.05 with a potential adjustment depending on LaCie's cash and debt position of LaCie at closing. The price could also possibly increase by up to 3% "in the event that the threshold of 95% of the shares and voting rights of LaCie would be reached by Seagate within 6 months following closing."
It what can only be considered a win for programmers around the country, Google has been found not guilty of infringing on Oracle's patents. It took the jury an entire week of deliberations to come to this conclusion. Of the eight claims across two patents, RE38,104 and 6,061,520, Google was acquitted of every single one.
Now that we have this decision, there is no need for the trial to move onto the damages phase as there are no damages to be awarded. The jury is no longer needed in the trial as the final decision as to Fair Use has been left to Judge Alsup to decide. The judge thanked the jurors and dismissed them adding that "this is the longest trial, civil trial, I've ever been in."
Google had been found to be infringing on Oracle's copyrights on a couple of counts, but it is unclear whether or not this was fair use. The jury was unable to decide unanimously if it was. The jury found Google guilty of just one count of infringement, but Judge Alsup later ruled they infringed on 8 other minor counts.
Judge Alsup still has to render a ruling on whether or not the SSO of the Java APIs can be copyrighted or not. Judge Alsup is set to receive briefs from both legal teams within the next hour, though its not apparent when the actual verdict will be rendered. He is also taking the next two days off for personal reasons. We will continue to keep you posted on the latest happenings in this trial.
If you want a new Xbox, you better get one now. The judge in the Motorola versus Microsoft patent infringement case has recommended to the six-person review commission that they ban imports of the Xbox 360 due to it infringing upon 4 of Motorola's patents. I can see where this could put a massive kink in Microsoft's current "buy a computer, get an Xbox" promotion.
In court documents that were released Monday, Judge Shaw recommended that the Xbox 360 4GB and 250GB be blocked and that Microsoft should have to post a bond worth 7% of the wholesale value of unsold Xbox's currently in the country. This ruling follows Shaw's previous ruling last month that Microsoft was in fact infringing on some of Motorola's patents.
"It is recommended that the Commission enter a limited exclusion order against infringing Microsoft products," Shaw wrote in his finding. "It is further recommended that the Commission issue a cease and desist order. Additionally, it is recommended that Microsoft be required to post a bond for importation of accused products during the Presidential review period."
The six-member commission is expected to review this decision and issue their final statement sometime in August. They have the ability to block imports of devices found to be infringing on US patents. It is also my understanding that the President would then review the finding and could overturn the ban if he wanted.
Yesterday I reported that Facebook shares were down 11-percent from the IPO launch price of $38 per share, to a shave over $34 per share. Today, they've dropped even more, down a total of 18.1-percent from $38 per share to $31.12 per share.
An 11-percent drop, is significant in itself, but an 18.1-percent drop is even more significant as it's barely days from its IPO launch. Business Insider has a great piece on it, where they've explained that once again, Wall Street insiders had some great information, where small investors an individuals were left out in the cold.
It seems that Facebook was not as powerful on the stock market, and that this information was shared among the elite before the IPO itself. If we take note that Mark Zuckerberg himself sold 30.2 million Facebook shares, netting him (before tax) a very tidy $1.1 billion. Various people along the line who have the means and power to have much more knowledge than you or I, or the normal investor, were told to cut estimates.
Customers of Comcast's Xfinity Voice will be getting some new features which could help customers save money. The new feature is called "Voice 2go" and will allow users to make calls over WiFi using their home phone number. The new service will also allow users to text from the number while on WiFi.
"We continue to enhance our Xfinity Voice service by adding new features consumers have come to expect from smartphones and mobile technology," said Cathy Avgiris, Executive Vice President and General Manager, Data and Communications Services. "These new tools enable customers to stay connected to their home phone service and take it with them virtually wherever they go."
Using the newly redesigned Xfinity Connect Mobile app, customers can make and receive calls and texts messages for free while using WiFi. The service will also work over a mobile phone's 3G or 4G data connection and not use any minutes. These text messages can also be sent internationally to over 40 countries, including Canada, Brazil, China and, soon, Mexico.
Xfinity subscribers can also receive up to four Personal Phone Numbers, which can be assigned to family members. The phone numbers work within the Xfinity app and can replace costly cell phone subscriptions for children. Instead, they would be able to use an iPod Touch or similar device to keep in contact.
Motorola has had a good run as its own company. They literally invented the mobile phone. But, as of late, they haven't been doing so well and Google has been courting them for some time. The deal has finally closed over seas in China, which is the last place that was holding back approval of the acquisition. Google has acquired MMI for $40.00 per share in cash which totals near $12.5 billion.
The CEO of Motorola Mobility has stepped down and Google has replaced them with one of their own. Dennis Woodside, formerly President of the Americas region for Google, will step up and become Motorola's next CEO. Google will continue to run Motorola as a separate company as well as keeping Android an open operating system.
Online video creator, Machinima has had a great funding round, where they received $35 million in funding. This was led by Google, which also included existing investors found in Redpoint Ventures, and MK Capital. If you remember, Google's YouTube were after some original programming, and have been investing heavily to do so.
At the moment, Machinima's network is the largest single page view generator for YouTube, where it enjoyed more than 1.6 billion video views in the month of April. So we can see why Google ponied up for the online video creator.
YouTube is also an invaluable partner of Machinima, as YouTube is the company's primary distribution and monetization platform. Machinima plans to spend the money on investing in content and global sales, as well as international expansion and distribution. This latest move from Google shows just how important online video will be in the future, while it's not a huge investment, Machinima by itself brings in some serious viewers.
The war between Samsung and Apple has been epic, but isn't it about time they settled it? Samsung Electronics' mobile division chief, JK Shin said over the weekend that they are still seeking to resolve differences in its international patent war with Apple.
Shin told reporters at the Seoul airport shortly before his departure for the US:
There is still a big gap in the patent war with Apple but we still have several negotiation options including cross-licensing.
When asked about the prospects for the company's memory chip business, Shin said that the 4G chip shortage was expected to drag on until Q4 of this year.
Foxconn are close to getting their cheque book out and writing a fat one for Apple to the tune of $210 million for a new production line that would be used by Apple, exclusively. The new investment would pave the way for the project to start in October in Hua'an City, part of the Jiangsu province in China, reports the China Daily.
The new plant will be of a decent size, measuring 40,000 square meters, and should hire 35,800 new employees. This is great for the local economy. The annual output of the new plant is set to be between $949 million and $1.1 billion, with the import and export value sitting at around $55.8 million.
35,800 new employees might sound good, but the Foxconn Zhengzhou Technology Park that is dedicated to making iPhones employs 120,000 people, while the Shenzhen-based plant employs an insane 200,000 people.
Facebook shares went live last week, at $38 per share, but they took a sharp dive today right down to $34.03, and 11-percent drop from the $38 starting price for the record-setting IPO. Friday's issues were blamed on technical difficulties, as traders had failed or delayed transfers.
Monday on the other hand, had analysts confirmed that Facebook and its banking partners, mostly Morgan Stanley, had overvalued the stock. 48 hours before the IPO went live, companies had decided to increase the number of shares sold by close to 25-percent, up to 484 million. A number of large investors are said to have received more shares than they expected.
Was the Facebook IPO launch a quick money grab? Overvalued stock, tonnes of press, too many shares and a very quick drop of 11-percent are all signs to me. It'll be interesting to see how the social network goes over the coming days, weeks, and months.
Yahoo have been having a hard time lately, with increased competition from Google and others, and have just announced today that they have reached a deal to sell part of their stake in China's biggest internet company, Alibaba Group Holdings Ltd.
The deal will have Alibaba buying back half of Yahoo's 40-percent stake in the group for a nice $7.1 billion. Alibaba will wave $6.3 billion in cash in front of Yahoo, as well as $800 million in Alibaba preferred stock. Alibaba are also required to buy back a quarter of the remaining shares at the price of a future IPO, or alternatively, allow Yahoo to sell them in the expected public offering in the near future.
This deal now pits Alibaba Group's worth at around $35 billion. Alibaba CEO Jack Ma said in a statement to Bloomberg:
The transaction will establish a balanced ownership structure that enables Alibaba to take our business to the next level as a public company in the future.
Alibaba is doing extremely well, with rumors that Alibaba's CEO owns a 7.4-percent share in the group, and is readying an initial public offering. Industry insiders are predicting that the Chinese online shopping industry will grow by 42-percent this year alone.
Spotify says "G'day" to Australia. In other words, Spotify is now available for use in Australia. This should make a good number of Australians happy, including our very own Anthony Garreffa. Spotify is launching three versions including Spotify Free, Spotify Unlimited, and Spotify Premium.
"Spotify is a game changer," says Kate Vale, Spotify's Managing Director Australia and New Zealand. "This is a revolutionary new music service that's free, simple, and provides lightning-fast access to one of the world's biggest music libraries. We hope Australian music fans will love Spotify as much as they do across Europe and the US."
Spotify Free is, as the name suggests free, and is ad supported. Spotify Unlimited costs $6.99 a month and gives users ad free access to Spotify a user's PC. Spotify Premium is $11.99 a month and provides the same features as the two prior and also allows users to listen to Spotify on the go on a smartphone, tablet, or other mobile device.
Discovery's CEO is not one bit happy with Dish Network's new ad skipping technology in the Hopper DVR. Discovery Communications CEO David Zaslav has let Dish Network know that skipping ads could damage the industry as content creators lose one of their revenue streams. As a result, subscription fees would likely skyrocket.
"Charlie Ergen and Dish are a distributor of content," he said. "They need us to reach homes with our content. And if there is not going to be advertising fees, then there needs to be a lot higher subscriber fees." With increasingly expensive shows and production costs, quality content needs to money offered by advertisers to keep subscription costs low.
As of right now, the Hopper DVR's technology only works on broadcast TV, but that doesn't mean it couldn't be used on premium channels such as Discovery. Time Warner Cable CEO Glenn Britt agrees that the technology could easily destroy TV. "The dual stream of advertising and subscription revenue has been great for content creators," he said. "We have more TV than we could have ever imagined. I don't think we want to destroy one of those revenue streams."
AOL CEO Tim Armstrong opinion differs: "The video and cable industry needs to think of advertising differently," he said. "The reality is that consumers today are super-engaged. So how what would you put around that program or in program that doesn't look like traditional advertising? How do you make more engaging advertising?"
Microsoft's Windows Phone stepped through the doors of China just two months ago, and in that time the Redmond-based company has already secured 7-percent of the smartphone market share.
Apple's iPhone has just 6-percent of the market share in China, which means in two months time, Microsoft are doing quite well for themselves overseas. Microsoft's Chief Operating Officer for the Greater China Region (wouldn't that look good on your resume?), Michel van der Bel, sees the market ghrowing further, saying "we've only just begun".
He notes that the combination of smartphones and Windows PC tablets will boost Microsoft's traction among both Chinese individuals, and businesses. Microsoft do face continued competition from Android, who has an astonishing 69-percent market share in China. Microsoft currently employs 2,500 or so people in its R&D department in China, but Bel says that Microsoft needs to, and will have to invest much more into the country.
Hewlett-Packard (HP) are set to slash up to 30,000 jobs in order to restructure themselves in the competitive business that is IT, thanks to the huge numbers smart devices have been pulling lately.
HP have nearly 350,000 employees, so we're looking at a reduction of 10-percent (or so) of their entire staff. Anonymous sources have said that HP would cut between 25,000 and 30,000 jobs. HP are expected to announce the cuts this week in their quarterly earnings call, where it's expected HP won't fare so well.
Cutting just 18,000 jobs would save HP nearly $1 billion per year according to Brian Marshall, an analyst for ISI Group. But, HP are expected to lose $5 billion of its annual revenue this year, down from $127 billion to $127 billion. New CEO Meg Whitman has said she wants to spend more money on research and development in order to stir up innovation.
ARM's CEO has some hefty expectations when it comes to the future of the notebook PC market, where he predicts the company will have processors inside between 10- to 20-percent of the notebook PCs by 2015.
Warren East spoke to The Wall Street Journal, where he said that ARM will have a bigger impact on the PC market than rival Intel will have, as it attemps to enter the smartphone market.
East may expect up to 20-percent market share for ARM-based notebooks by 2014-2015, but he believes Intel-powered smartphones will only take between 5- and 10-percent of the smartphone market. Intel-powered smartphones have just begun their roll-out, with many more over the coming months.
There's been a lot of news today about Facebook and its IPO and here is another. Facebook has just completed its first acquisition after becoming a publicly traded company. The mobile commerce startup Karma has been acquired by Facebook. Karma specializes in apps for gifting friends and family. The acquisition sees 16 employees joining Facebook.
The terms of the deal are undisclosed as of now. The acquisition should help Facebook monetize its app and mobile offerings, something its admittedly weak in. Facebook said in a statement: "We've been really impressed with the Karma team and all they accomplished in such a short time. This acquisition combines Karma's passion and innovative mobile app with Facebook's platform to help people connect and share in new and meaningful ways."
A lot of the talk today has been about Facebook's IPO which, while successful, did have a few surprises in store for Facebook and onlookers. First, Facebook didn't start trading on time due to a Nasdaq glitch. Apparently Nasdaq had an issue with its message relay system which wasn't sending out confirmations of purchases and sales.
That glitch doesn't seem to have affected total trade volume, however, as the Facebook IPO becomes the first one ever to trade 500M stocks in its first day. Prices for the stocks remained fairly level, spiking up to $42 and closing at $38.37. The stock price was set at $38 to start trading off. Within the first 30 seconds, 82 million shares had been traded.
It's a bit surprising that the stock didn't spike above $42 given the hype surrounding the IPO. The fact that it traded pretty level is a good indication that Facebook chose a good opening price. As such, it netted Facebook just about as much money as it possibly could and didn't give the early traders the money instead.
BitTorrent may not be all bad for the music industry which is contrary to how they would like to portray it. It seems that piracy could aid album sales, if a new study is to be believed. North Carolina State University assistant professor Robert Hammond examined prerelease albums being BitTorrented and the album sales of said albums.
The investigation netted some interesting results. What he found was that there was a correlation between the two, although it was pretty small. Keep in mind that correlation does not equate to causation. Since this is an observational study rather than an experiment, it's impossible to say with certainty that BitTorrent aids album sales.
It is, however, possible to indicate that they seem to. After watching 1095 albums, Hammond noted "The findings suggest that file sharing of an album benefits its sales. I don't find any evidence of a negative effect in any specification using any instrument." The average increase in sales was around 59.6 albums, so its not a landslide increase.
This study also does not account for BitTorrent use after the release, nor does it account for singles downloads and sales, which are more likely to occur with a casual pirate. In other news, a similar study has shown similar results in that movie rips don't seem to affect box office revenues.
It looks as though Facebook may have to sell just a bit more stock to pay for a lawsuit that has been filed in San Jose, California Federal Court. While things may be looking great Wall Street, the courtroom picture is a bit more bleak. Stewarts Law US has combined 21 individual lawsuits into one amended class action suit seeking $15 billion.
The previous lawsuits date back to 2011 and allege that Facebook violated user privacy by tracking web usage. The new class action lawsuit alleges that Facebook violated the US Wiretap Act, the Computer Fraud and Abuse Act and the Stored Communications Act, along with others. The US Wiretap Act grants up to $100 a day per violation up to $10,000.
Specifically, the lawsuit makes claims that Facebook tracks users even once they are no longer logged in. "This is not just a damages action, but a groundbreaking digital-privacy rights case that could have wide and significant legal and business implications," David Straite, a Stewarts Law partner told Bloomberg via e-mail.
This isn't the first time someone has sued the social media giant over alleged web tracking. Back in 2011, a Mississippi resident filed a lawsuit after 42-year-old Kansas lawyer John Graham did. These aren't the only instances, just the ones that come to mind. At the time of writing, Facebook has not commented on the lawsuit. I imagine they are all sleeping after the all-night hackathon.